How Apple Profits From A System That Abuses Children -- And Why It's So Hard To Stop

There may not be a simple solution, but something has to change.

21/01/2016 9:23 AM AEDT | Updated 21/01/2016 9:23 AM AEDT
FEDERICO SCOPPA via Getty Images
People separate cobalt from sand and rock in a lake in the Democratic Republic of the Congo last year.

A new report from Amnesty International suggests that companies including Apple, Samsung and Sony are profiting from child labor in Africa -- and no one should be surprised.

It's been public knowledge for years that electronics are stuffed with minerals that come from the Democratic Republic of the Congo, a war-torn place rich in must-have materials that are rarely found elsewhere. Less well-known, however, is how these sometimes blood-soaked metals move from the DRC into the supply chains of some of the world's richest and most powerful tech companies. While these companies carry considerable influence and are aware of the controversy surrounding their supply chains, a number of complicating factors make it difficult -- if not impossible -- for them to solve the problem of child labor.

Amnesty says its report, published Monday, is the "first comprehensive account" of how cobalt ore found by children enters the global supply chain. The group focused on cobalt specifically for two reasons: One, it's a key component of the lithium-ion rechargeable batteries used in phones. Two, the material stands apart from other "conflict minerals" you may have heard of because it doesn't contribute to armed groups in the country the same way other materials do, and as a result receives less scrutiny.

Why This Matters

It's estimated that more than half of the world's cobalt supply comes from the DRC. Within the country, 20 percent of the cobalt comes from so-called "artisanal miners," a category that "include[s] children as young as seven who scavenge for rocks containing cobalt in the discarded by-products of industrial mines, and who wash and sort the ore before it is sold."

Apart from the obvious, that's a problem because exposure to cobalt dust can result in "hard metal lung disease," the Centers for Disease Control notes, which can kill those who work with the material

So, your electronics are, if not directly the result of child labor, potentially connected to a system that exploits kids and puts their health at risk.

How It Happens

Make no mistake: The path from the DRC to your local Apple Store is complicated. Companies do not simply buy refined cobalt from a group of kids -- there are intermediaries upon intermediaries. The entire process is opaque, which is part of the problem. We dug through Amnesty International's new report to explain the process.

Amnesty's flow chart below is the simplest way of visualizing the steps required to bring cobalt out of Africa and into your phone's battery.

Amnesty International
Mobile users: Click here for a larger version.

It starts at the mines, where workers extract minerals that are eventually refined into cobalt. If children find minerals, they sell them to adults or "small scale traders" who take them to "licensed buying houses." Then they're sold to bigger companies that smelt the material and sell once again to different companies: the ones that use the cobalt in lithium-ion battery components.

We're not done yet. The component manufacturers aren't the same companies that manufacture the actual batteries in your phone. So the components are passed once again to different institutions. Then, finally, the batteries are given to brands you're familiar with: Apple, Samsung, LG, Dell, Microsoft, Vodafone, Lenovo and so on.

There's nothing straightforward about this system. It speaks to how difficult all of this is to track and why Amnesty's investigation was so needed. 

This chart visualizes the supply chain, but with company names attached:

Amnesty International
Large version

At the top of the entire thing is Congo Dongfang Mining International (CDM), a "100 percent owned subsidiary" of Huayou Cobalt, a Chinese company and one of the biggest makers of cobalt products in the world, according to Amnesty. The report states that 24 percent of Huayou Cobalt itself is controlled by Chinese state-owned entities.

This might be where the biggest problems happen. While there may be corruption earlier on -- kids give materials to traders who misrepresent where the minerals are sourced from -- Amnesty found that middlemen and the smelters fail to take proper steps to discourage that corruption. The law doesn't require them to.

"The buying houses do have to know where the minerals come from," Patricia Jurewicz, director of the Responsible Sourcing Network, explained in an email to The Huffington Post. "It may not be required by law, but if they want to sell their minerals as 'conflict-free' they need to be able to trace the minerals back to a 'conflict-free' mine."

But cobalt isn't in the same category as "conflict minerals" that are used in other electronic components. These minerals -- gold is one of them -- are also required to make devices you might enjoy and have been the subject of much attention and even legislation over the years.

Amnesty ultimately concluded that "there is a high risk that Huayou Cobalt is buying (and subsequently selling) cobalt from artisanal mines in which children are engaged in hazardous labor."

"Since cobalt is not on the list, it receives less scrutiny," Jurewicz said.

Child labor is a different issue altogether.

"Since the legislation is focused on 'conflict' and not on 'child labor' there is not a strong system in place to analyze the conditions of cobalt mining," Jurewicz added.

The Amnesty report states that CDM buys cobalt from local companies and brokers in cash. These companies and brokers "are not obliged by law to ask any other questions such as the exact location of where the mineral was mined nor about the conditions of extraction, such as whether children were involved." 

Huayou Cobalt, the owner of CDM, told Amnesty that following a 2008 Bloomberg report linking the company to child labor in the DRC, it's taken steps to audit its suppliers. The company claims that it has a "code of conduct" prohibiting child labor, though it wouldn't explain how or if it enforces that policy.

Amnesty ultimately concluded that "there is a high risk that Huayou Cobalt is buying (and subsequently selling) cobalt from artisanal mines in which children are engaged in hazardous labor."

And then that cobalt is distributed throughout the world, as you can see here:

Amnesty International
Large version

Once that happens, it's tough to trace it back to the source. Amnesty asked three notable battery component makers if they were using cobalt distributed by Huayou Cobalt. One didn't reply, one denied it -- even though Huayou Cobalt documents from 2014 reportedly state otherwise -- and the third failed to reply but then "advised" a client that it had indeed purchased cobalt oxide from the company.

Apple employees in the Wangfujing shopping district in Beijing applaud customers after they bought newly released iPhones. The company said it's trying to do more to figure out where its cobalt is coming from.

The Blame Game

There's no reason to let a company like Apple off the hook. That tech giant is the world's most profitable corporation, with billions upon billions upon billions in profits. It has the resources to make a difference.

"If you're a corporate executive with these minerals in your products, there is no excuse for turning a blind eye to child labor in your supply chains," Holly Dranginis, senior policy analyst at the Enough Project, told HuffPost.

"You have a clear ethical responsibility to find out where their materials are coming from, given these risks of abuse," she added.

Apple did not respond to requests for comment from HuffPost. But it, like other tech companies, told Amnesty that work is being done to audit where its cobalt is coming from.

"As we gain a better understanding of the challenges associated with cobalt we believe our work in the African Great Lakes region and Indonesia will serve as important guides for creating lasting solutions," an Apple representative told Amnesty.

But that speaks to why it's so difficult to tackle these issues. A corporation like Apple needs to pinpoint where problems start in its supply chain, which can require difficult work and damage business relationships. Companies higher up the chain, like Huayou Cobalt, need to take steps to stop child labor practices. And there are political and cultural problems within the DRC that make matters worse.

"Ultimately it is the DRC government that bears the responsibility for this crisis," Andrew Arriaga, mineral program manager for the Responsible Sourcing Network, told HuffPost in an email. 

"They have one of the worst corruption scores in Transparency International's index," he continued. "[President Joseph] Kabila is pressuring UN to withdraw peacekeepers while undermining the democratic process; money has been mismanaged while the most basic problems of governance, infrastructure, and labor rights have been ignored by the DRC government - despite aid money pouring in from foreign governments."

Complicating things further, past reports indicate that legislation intended to curb the trade of "conflict minerals" actually hurts miners.

The situation isn't simple. But perhaps greater efforts from those in positions of power could make a difference.

"We need systemic change, and real accountability," Dranginis told Huffpost, "and that will take policy and behavior change from a range of actors: end-user companies, smelters, traders, and of course government officials in the DRC and surrounding region."